Can a 50/50 member of a LLC Company pay himself more then the other memeber

UPDATED: Sep 30, 2022

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Can a 50/50 member of a LLC Company pay himself more then the other memeber

I had to miss some time this summer with my step
dad was fighting cancer. Is it right for my partner to
pay himself 100 of the profits?

Asked on January 30, 2017 under Business Law, Washington


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Legally, one member of an LLC can be paid more than other members, regardless of ownership interests; for example, a  minority owner could be paid more than a majority owner. BUT to do so requires the agreement or consent of a majority of the ownership: i.e. a majority of the ownership must agree to the payment or compensation scheme. In a 50-50 LLC, neither member has a majority ownership; both members would have to agree or consent to this. If you, as 50% owner, did not, then it was illegal.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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